UWM Holdings Corp., the publicly traded indirect parent of United Wholesale Mortgage based in Pontiac, announced its fourth quarter (Q4) and full year results for 2021, which showed a Q4 net income of $239.8 million and full year net income of $1.6 billion.
“2021 was a fantastic year for UWM with incredible milestones: from becoming a public company to delivering another year of record production,” says Mat Ishbia, chairman and CEO of UWM.
“We have continued to be relentless about developing and launching innovative technology solutions like BOLT, the most advanced underwriting system in the industry, to enable sustainable and profitable growth for both UWM and our broker partners. We also delivered our best fourth quarter production of all time, coupled with growth in the broker channel.”
The company recorded originations of $226.5 billion in 2021, a 24 percent increase from 2020. Full year purchase originations of $87.3 billion in 2021 were a 103 percent increase compared to 2020. The net income of $1.6 billion was inclusive of a $587.8 million decline in fair value of mortgage servicing rights (MSRs), as compared to $3.4 billion of net income in 2020 inclusive of $573.1 million of expenses related to amortization, impairment, and payoffs of MSRs.
UWM remained the largest wholesale mortgage lender in the U.S. by closed loan volume for the seventh consecutive year, with approximately 31 percent market share of the wholesale channel. The company’s total equity of $3.2 billion was up compared to 2020, which saw $2.4 billion.
The unpaid principal balance of MSRs increased to $319.8 billion with a weighted average coupon (WAC) of 2.94 percent, compared to $188.3 billion with a WAC of 3.13 percent in 2020.
The company’s Q4 results showed originations of $55.2 billion, slightly above 2020’s Q4 originations of $54.7 billion. Purchase originations of $24.5 billion were recorded, a 103 percent increase compared to $12.1 billion in Q4 2020. The $239.8 million net income was inclusive of a $139.0 million decline in fair value of MSRs, as compared to $1.4 billion of net income in Q4 2020 inclusive of $215.4 million of expenses related to amortization, impairment, and payoffs of MSRs.
In Q4 2021, the company proactively raised the loan limits on conforming loans in anticipation of the upcoming Federal Housing Finance Agency (FHFA) increase effective Jan. 1, 2022. As a result of this early roll-out of the increased loan size limits and the aggregation of loans for private label securitization transactions, UWM’s outstanding loan balances and the amounts outstanding under its warehouse lines materially increased as of Dec. 31, 2021, and in conjunction, its cash balance decreased.
These amounts returned to more normalized levels when these loans were sold to the government sponsored enterprises (GSEs) in early Jan. 2022. As of Jan. 31, 2022, the mortgage loans at fair value had decreased to $7.9 billion, as compared to $17.5 billion at Dec. 31, 2021, and the amounts outstanding under our warehouse lines of credit had decreased to $7.0 billion as compared to $16.0 billion in the same time frame. The cash balance as of Jan. 31, 2022, had increased to $887.7 million, as compared to $731.1 million a month earlier.
“Our decision to temporarily increase our assets and utilize our cash during Q4 is a great example of the benefits of being a public company and having significantly more cash, equity and liquidity than we have had through most of our history,” says Ishbia.
“Being able to opportunistically roll out higher conforming loan limits early was a strategic move giving borrowers and brokers a financing option that they would not have otherwise had. It serves as another example of the partnership and value that UWM provides to independent mortgage brokers.”
BOLT was developed in-house by a team of technology and mortgage experts and launched in September of 2021. The technology speeds up the application to clear-to-close time on conventional loans that utilized BOLT by an average of approximately 5 days.
UWM Appraisal Direct, launched in October of 2021, provides mortgage brokers a streamlined, transparent process for the scheduling, execution, and delivery of an appraisal that they can easily track, which will deliver faster appraisals to offer a better experience and relieve a key pain point in the mortgage industry.
“As the industry navigates rising rates and low housing inventory, UWM is well-positioned to succeed by doing what we do best – proving a mortgage broker is the fastest, easiest and most affordable option for borrowers,” says Ishbia. “With continued channel growth and elite industry-leading service, we are poised to reach our goal of becoming the nation’s number one overall mortgage lender.”
Mat Ishbia and United Wholesale Mortgage was featured in DBusiness magazine’s July/August 2021 cover story, which can be read here.